Rob Clay &
Chris Harman

British Steel in Crisis

(May 1973)

From International Socialism (1st series), No.58, May 1973, p.15-16.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

The government’s plans for the steel industry, officially embodied in its recent White Paper, envisage a £3,000 million investment programme, an increase in steel production by 50 per cent, and a rundown in the labour force by 50,000 over the next seven years.

If the government’s own figures are taken, then it is quite clear that many single-industry towns, such as Shotton, Ebbw Vale and Consett, will become ghost towns. In other areas, such as Teesside and Motherwell, already high levels of unemployment will be aggravated. In fact indications are that the government’s figures grossly underestimate the real level of redundancies that will be caused.

Background to the Crisis

Since the early 1950s there have been internationally major technological changes in the production of steel. The most important of these has been the development of basic oxygen furnaces, known as BOS plants. Japan led with the introduction of the new technology. By 1970, 80 per cent of its total crude steel output was from BOS plants. The European steel industry then began to follow suit.

But the private steel industry in Britain was completely unable to match such efforts. In 1963, 76 per cent of British steelmaking was still based on open hearth plants, technologically most backward.

In the years 1965 and 1966 – preceding nationalisation – there was no investment at all in British industry. A company like the Consett Iron company was capable of paying out £1,318,000 in dividends, despite a loss of £347,000. When the nationalised British Steel Corporation (BSC) was formed in 1966, the (Labour) government paid £1,165 million to private owners for assets later valued by the BSC at only £834 million.

The managers of the newly nationalised corporation saw only one way of competing successfully with Europe and Japan. That was to put into effect the recommendation of the Benson Report of the year before: a productivity drive and closures leading to mass sackings.

Between 1967 and 1972, 27,000 jobs disappeared. Now a further 50,000 redundancies have been officially announced.

The Real Figures

Minister for Trade and Industry Peter Walker stated in December that the aim of the steel corporation’s £3000 million development plan would be to increase steel production by 50 per cent while running down the labour force from about 230,000 to about 180,000 by 1980.

But a glance at the overall picture of the steel industry would seem to indicate a much greater fall in the number employed. The government’s figures presuppose that productivity per man will be 180 metric tons a year by 1980. But the BOS plant in the Oita works in Japan produces 1000 tons a year per man. The new British Steel Corporation BOS plant at Redcar aims at 800 tons a man year. On the other sites that the steel corporation is to develop from exisisting works – at Scunthorpe, Port Talbot, Lackenby, Llanwern and Ravenscraig, productivity is likely to vary between 300 and 550 tons per man year.

The corporation hopes to produce 80 per cent of its output from these plants in 10 years time. And its chief executive, Dr H.M. Finniston, speaking in 1970, indicated that the planned level of productivity for the industry as a whole for 1980 was at least 350 tons per man year.

But on such a basis, the number of men required to produce the corporation’s output target by that date would be much less than indicated by the government. Only 94,000 workers including managerial and service personnel would be required to produce 33 million tons and 108,000 to produce 38 million tons. That would mean cuts of about 130,000 in the labour force – more than twice as many as suggested by the minister.

The international context in which the rationalisation is occurring will produce continual pressures on the corporation to achieve such levels of productivity and reductions in the labour force. The other advanced industrial nations in the West are engaged in investment programmes similar to that of the BSC. The largest steel companies in France, Germany, Holland, Italy and Spain are well advanced in BOS developments that match and surpass those at Scunthorpe, Lackenby/Redcar, Port Talbot and Llanwern.

Thus even when the present investment and rationalisation programme is complete, the BSC may still be in an unfavourable position to meet the stringent competition arising from a world surplus of steel capacity.

The Tory Strategy

The present programme of closures and redundancies in British steel started in 1971 and is intended to continue until the end of this decade. This is the plan agreed between the BSC and the government for rationalising the industry to the level of productivity and manning earlier indicated. The closures that have already taken place correspond closely to a BSC planning document removed from corporation files in 1970.

In March 1971 closures were announced for iron and steelmaking at Cargo Fleet in Teesside, a complete integrated steelworks at Irlam in Lancashire and a smaller number of redundancies elsewhere on Teesside and also at Scunthorpe. Last summer an end to steelmaking was announced in a number of Scottish open hearth plants. At the end of the year Ebbw Vale, East Moors and Hartlepool received their death sentences, separately and punctuated by the Tory White Paper which confirmed that a number of other steel towns such as Consett, Shotton and Corby were doomed.

What emerges is that despite a clearly agreed strategy which has existed for two years for running down the workforce in BSC, the corporation and the government are making their intentions known little by little and amid a deliberately created flurry of rumour, false promises and diversions. The purpose is to avoid a major confrontation with steelworkers on a national scale. So far they have succeeded.

The Offical Response

The policy of all the unions in the steel industry has been to accept in principle the BSC’s rationalisation plans. Dai Davies of BISAKTA, John Boyd of the craft unions and Hector Smith from the blastfurnacemen, all accept the argument that this is the only way to ensure that the industry survives at all. They have therefore played a role mainly as apologists for Lord Melchett and for the Tories. Davies even publicly thanked Melchett for the ‘humane’ manner in which he is imposing mass sackings. Certainly throughout this period the union bureaucracy has been more concerned with the problem of preventing militant outbursts of resistance to closures than with that of opposing the corporation’s strategy themselves.

In some areas new investment has been promised. In particular, Teesside is to have a major new works at Redcar, adjacent to the present Lackenby site. The BSC’s estimate of probable employment on this has dropped form 13,000 to 7,000 over the last year and the final figure is more likely to be around 5,000. This would hardly begin to compensate for the redundancies that will take place in the area between now and the completion of the plant. In all other areas the picture is grim. Nevertheless, Labour MPs have reacted to what is a national strategy in a manner which indicates nothing but gross opportunism based on local chauvinism. For instance the White Paper was greeted with delight by MPs at Port Talbot, Sheffield and Teesside, and with horror in Ebbw Vale, Cardiff and Consett.

Resistance

Rank-and-file organisation in BSC has traditionally been weak. Until recently there had never been a national meeting of shop stewards or convenors. Resistance to closures started on a very parochial basis. The common cry was ‘We accept rationalisation in general, but we are a special case.’

As a result local ‘non-political’ ‘broad-front’ organisations have been formed to persuade BSC and the government that a mistake has been made in particular case. These bodies usually include Labour and Tory MPs, church representatives, town clerks, full-time union officials and the like. They are in favour of petitions to Edward Heath and are always opposed to industrial action. In more than one instance they have organised ‘days of prayer’ to save the steelworks.

A variation on this is the ‘scrutiny committee’ proposed by Michael Foot at Ebbw Vale. The purpose of this is to inspect the BSC accounts in order to discover some mistake they may have made in relation to the necessity of closing Ebbw Vale. Such strategies are based on the unlikely assumption that either the corporation’s planners are totally incompetent, or that the government that has made a decision over two years and has anticipated ‘dignified protest’ is going to change its plans when ‘dignified protest’ begins.

This year a more militant and effective form of organisation has emerged in a number of works. Action committees consisting of shop stewards from every union and section in a particular works have started to organise lobbies, demonstrations and strikes. In some cases occupations are being planned, although these are at present of the less effective ‘work-in’ variety.

Action committees are now in operation at Stanton in the Midlands (which is by far the longest established) and also at Ebbw Vale, East Moors, Corby, Consett and Shotton. In Wales there have been a number of one day strikes, and well supported marches in London by Shotton and Ebbw Vale workers have demonstrated the determination and militancy felt despite attempts by hundreds of police to interfere with the demonstrations.

In the meantime a growing number of visits and local conferences are taking place between works threatened with closure. The Shotton action committee made it clear from the start that they were opposed to all redundancies, not just those at Shotton, and the notion of solidarity has been spreading.

In response to the mounting pressure, the TUC steel committee called a delegate conference in Sheffield early in March. This was intended as a diversion from other militant activities. At the conference no resolutions were allowed and the policy of conditional support for the government – BSC programme was spelled out once again. Despite the fact that most of the delegates were hand-picked moderates, there was an overwhelming feeling of disgust with the platform’s attitude.

Following tremendous efforts by the Action Committee at Shotton a National Action Committee was founded on 13 April. At the founding conference 90 delegates were present from 26 different works elected to represent various local shop stewards committees. This was an historic meeting. It brought together, not only the areas facing closure, but the large ‘heritage’ sites that the BSC’s future strategy depends on. It was spelled out and agreed that the function of the committee was to enable the rank and file to embark on the job that the paid officials were unwilling to undertake: to unite steelworkers in a militant fight against the Tories’ plans to throw half the workforce on the dole.